Kotek's legally fraught tax repeal

A 1935 Attorney General opinion highlights the Governor's fraught legal path to repealing the tax hike she recently and desperately sought

Former Oregon Attorney General Isaac Homer Van Winkle, author of a 1935 opinion that the legislature cannot repeal a bill subject to a signature-verified referendum

Oregon Governor Tina Kotek’s path to hiking taxes while winning re-election became yet more tortured last week as a recently unearthed 1935 attorney general opinion highlighted questions about whether she and the legislature can lawfully repeal the unpopular tax hike they passed last year. Oregon Journalism Project first reported on the existence of the opinion January 15.

A referendum triggered by the signatures of 250,000 Oregonians to undo the $4.3 billion tax hike is slated to appear on the November ballot with Kotek and legislative Democrats, all of whom voted for the hike. In early January, Kotek called for repeal of the bill that included the tax hike as well as other transportation-related provisions. She wants to repeal her signature legislative accomplishment because Oregonians hate it and might be especially motivated to turn out to vote against it, and Kotek.

Whether Kotek and Democrats can lawfully repeal their tax hike before Oregonians have a chance to do it is a complicated question, the answer to which may depend on the precise nature of a legislative repeal, if one is attempted.

Here’s a quick rundown.

The 1935 Attorney General opinion

We’ll start here, because this is the part people are talking about. In 1935, delightfully named Attorney General Isaac Homer Van Winkle advised Governor Charles Martin to veto a bill repealing a prior bill, subject to a referendum petition having received the requisite number of signatures, that increased student fees at public Oregon colleges.

In his page-and-a-half memo, Van Winkle wrote the Oregon Constitution’s referendum provision as follows:

[W]hen a legislative act is pending under a referendum, until the people act upon it, it ceases to be an act and is nothing more than a bill pending for legislative action. The right of the people to a referendum vote on a statute enacted by the legislature can not be defeated by a subsequent repeal of the act referred.

Van Winkle viewed the referendum process as the people asserting themselves into the legislative process, an assertion that could not be blocked, once triggered, by the legislature.

There is support for Van Winkle’s interpretation in the text of the Constitution’s referendum provision, contained in Article IV, Section 1: “The legislative power of the state, except for the initiative and referendum powers reserved to the people, is vested in a Legislative Assembly, consisting of a Senate and a House of Representatives.” (Emphasis added). That sentence suggests the framers of the Oregon Constitution viewed legislative power as the province of the legislature unless and until the people exercise their referendum power.

Kotek intends for the legislature to take the legislative power back from the people. While the Constitution does not prohibit the legislature from doing so, it is telling it provides no means of the legislature doing so. The Oregon statute governing the nuts and bolts of the referendum process does not address the issue either.

The statute specifically contemplates withdrawal of a referendum by the people who gathered signatures - called chief petitioners - but only before they submit signatures for verification by the Secretary of State. So, even if the transportation tax referendum petitioners wanted to pull the measure they drafted from consideration of voters, they could not do so, now that the Secretary of State has verified the signatures.

Kotek’s intended repeal requires a finding the legislature has the authority to remove a referendum from the ballot (1) even though that authority is not stated in the Constitution or statute and (2) at a time the only withdrawal authority mentioned in the law - that of chief petitioners - is specifically forbidden.

For those reasons, Van Winkle’s opinion is an important consideration, especially in light of a reading of the constitutional provision it interprets. However, attorney general opinions are just that, opinions. They often guide agency action, but they are not necessarily binding on a court, especially if there are conflicting precedents.

So, our analysis continues . . .

Legislative Counsel’s opinion

On January 9, Dexter Johnson, an attorney in the Legislative Counsel’s office, wrote referendum chief petitioner State Rep. Ed Diehl (R-Scio) he believed the legislature could repeal the transportation tax bill and “the effect of the repeal would be to render the referendum election as moot and so the election would not take place,” the opposite conclusion to that suggested by the Van Winkle opinion.

Johnson’s opinion relies on the view that the legislature and the people share legislative power concurrently, so either may exercise that power, even if the other is in the process of doing so. It specifically relies on two Oregon Cases, Marr v. Fisher (1947) and Bernstein Bros., Inc. v. Dept. of Revenue (1983).

Marr, in my reading, is not directly applicable. In that case, the legislature passed two laws, relating to income tax, the effectiveness of which depended on whether voters approved a sales tax. Opponents argued the multiple contingent bills deprived voters of the right to a referendum. The court held petitioners could have sought referendum on both contingent bills, so the bills did not violate the Oregon Constitution. The case does not address an attempt by the legislature to repeal a bill subject to referendum after the referendum was certified by the Secretary of State.

Bernstein Bros. similarly addresses a constitutional challenge against a contingent bill passed by the legislature. In that case, the legislature passed a temporary cigarette tax that would become permanent if voters approved, by a vote referred by the legislature, the tax. Opponents argued this deprived them of the constitutional right to a referendum on the bill. The court held the bill was constitutional. Like Marr, this case does not address an attempt by the legislature to repal a bill subject to referendum.

A legislative counsel opinion has no binding authority on agencies or courts, even if it relied on precedent on point to the question at hand.

Considering the plain language of the Constitution and statutes and Van Winkle and Johnson opinions and caselaw relied on by them, I think the Van Winkle interpretation is more applicable to our current question. However, the Secretary of State, who will make an initial determination about the effect of a repeal, if passed by the legislature this year, and the Oregon Supreme Court, which probably would make a final legal judgment, may disagree.

It’s even more complicated than that

The legal analysis is further complicated by the fact that the referendum would only dispose of the tax provisions from the transportation bill. There are many other provisions, including oversight, adjustment to trucker weight-mile tax calculations and a removal of references to highway tolling from Oregon statutes.

If a legislative repeal is not limited to just those tax provisions subject to referendum (and there are political reasons it may not be, which are beyond the scope of this article), does the legislature’s action, in Johnson’s phrasing, render the referendum “moot?” And what is the legal mechanism - unstated in Oregon law - for removing a tax referendum from the ballot even if the undelying bill is repealed? Is it possible a legislative repeal would leave the referendum on the ballot but render its outcome moot, with the taxes already having been repealed?

And what would be the political effect of a mooted referendum on the ballot? Would it serve Kotek’s political goals, or would Oregonians still turn out to register their obvious displeasure with her handling of transportation taxes? What is the effect of the legal uncertainty on Kotek’s political strategy?

In short, I don’t know, yet.

This story was edited around 7:45 am January 20 to credit Oregon Journalism Project for first reporting on the existence of the Attorney General opinion.

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